Atty. Larry Yang

Downey Regional Medical Center files bankruptcy

Wednesday, 23 September 2009 01:17 Atty. Lawrence Yang

DOWNEY Regional Medical Center (DRMC) announced last week that it filed for Chapter 11 bankruptcy on September 14, 2009. The hospital said that bankruptcy was in the best long-term interests of the hospital, the community, it’s employees, physicians, patients, vendors, and other stakeholders. But wait. Isn’t bankruptcy the end of life for a business or an individual? On the contrary, bankruptcy reorganization ensures that a business or individual survives as a financially viable entity in the future by allowing it to get rid of unwanted debt, unprofitable contracts, lawsuits and other legal claims while allowing the business or individual to continue operating and keeping assets that it needs to reorganize. Thus, GM and Chrysler are still doing business now after declaring bankruptcy earlier this year.

Dole Foods overleveraged by debt

Sunday, 20 September 2009 22:35 Atty. Lawrence Yang

WE all eat Dole pineapple and bananas. Dole is the largest fresh produce business in the United States. One of the tourist attractions in Oahu is the Dole plantation. The business was started by a young man who was able to buy large tracts of plantation land at the turn of the 20th century right after the queen of Hawaii was overthrown by our military at the instigation of local businessmen.

Dole foods overleveraged by debt

Tuesday, 15 September 2009 20:14 Atty. Lawrence Yang

Orange County Register owner files for bankruptcy reliefhave

Sunday, 13 September 2009 18:19 Atty. Lawrence Yang

FREEDOM COMMUNICATIONS, owner of the Orange County Register, the largest daily newspaper in that county, as well as the owner of 32 other daily newspapers and 77 weekly newspapers filed for Bankruptcy reorganization on September 1, 2009. The company has about $1.0 billion of liabilities and assets with book value of $757 million. However, the company also said that the current fair market value of those assets is substantially less than the book value. Let’s assume that the market value is actually half the book value. Those assets would have a current market value of about $380 million. Theoretically, a liquidation of the company would pay creditors 38 cents on the dollar. However, the main lenders of the company, Chase and Union Bank, both owed a total of about $771 million, have agreed to convert the money owed them into equity in the company, and for total control of the company. Normally, in this kind of situation, shareholders are left with nothing or close to nothing. Thus, family members of the founder of the company and previous investors will end up owning not more than 2% of the company that emerges from bankruptcy. The company’s bankruptcy lawyer told the court that they expect to get through bankruptcy court on an expedited basis in a couple of months.

Orange County Register owner files for bankruptcy relief

Tuesday, 08 September 2009 21:41 Atty. Lawrence Yang

FREEDOM COMMUNICATIONS, owner of the Orange County Register, the largest daily newspaper in that county, as well as the owner of 32 other daily newspapers and 77 weekly newspapers filed for Bankruptcy reorganization on September 1, 2009. The company has about $1.0 billion of liabilities and assets with book value of $757 million. However, the company also said that the current fair market value of those assets is substantially less than the book value. Let’s assume that the market value is actually half the book value. Those assets would have a current market value of about $380 million. Theoretically, a liquidation of the company would pay creditors 38 cents on the dollar. However, the main lenders of the company, Chase and Union Bank, both owed a total of about $771 million, have agreed to convert the money owed them into equity in the company, and for total control of the company. Normally, in this kind of situation, shareholders are left with nothing or close to nothing. Thus, family members of the founder of the company and previous investors will end up owning not more than 2% of the company that emerges from bankruptcy. The company’s bankruptcy lawyer told the court that they expect to get through bankruptcy court on an expedited basis in a couple of months.

Legal liability for liens after foreclosure

Sunday, 30 August 2009 21:35 Atty. Lawrence Yang

LIENS are claims against real or personal property, which legally attach to property. A lien may be created voluntarily or involuntarily. An example of a voluntary lien is a security agreement when you purchase a car where you give the car as collateral for the car loan. An example of an involuntary lien is one that emanates from a judgment. The winning party in a lawsuit can use the judgment to obtain a lien that attaches to all of the losing party’s properties anywhere in the United States. For this discussion, we will focus on mortgages or trust deeds on real estate such as a house.

US Postal Service declare bankruptcy?

Sunday, 23 August 2009 18:09 Atty. Lawrence Yang

THE USPS lost $2 billion last year. This year, so far, it has lost $7 billion. The increase in the price of stamp recently to 42 cents will not stop the hemorrhage of cash. The USPS will continue to lose money at an alarming rate in the future. Electronic mail has become the preferred means of communication between humans because not only is there no delay in getting the message to the other side, it’s also free. On the other hand, the cost of mailing out a letter that will get to it’s destination in several days is the cost of an envelope, 42 cents for the stamp, gasoline to get to the post office, depreciation of your car because you use it to get to the post office, and at least half an hour to get to the post office and back to your house. Thus, people now prefer to pay their bills electronically, text their friends, send emails and twitter. All of these activities are being done at the expense of the post office. Communicating by paper and mail is getting less everyday. Think of Kodak film and Polaroid cameras. Once the behemoths of business and industry now obsolete because of digital cameras. An advance in technology, particularly communication technology, has rendered the USPS practically obsolete. There will come a time when people will only mail packages, not letters. The writing is clearly on the wall. Thus, the recent announcement by the General Accounting Office that the USPS is in danger of financial insolvency should not come as a surprise to anybody.

Mortgage cramdown bill resurrected

Sunday, 16 August 2009 18:39 Atty. Lawrence Yang

THE legislative part of Obama’s mortgage relief plan was to adopt a law amending the bankruptcy code to empower bankruptcy judges to modify mortgages by reducing the balance of the mortgage to the current fair market value of the house to achieve a lower mortgage payment and mortgage balance. For instance, if the outstanding balance of the mortgage were $400,000 while the fair market value of the house is $250,000, the amendment would allow a bankruptcy judge to cut the balance owed to $250,000 and reduce the mortgage payment accordingly, in a chapter 13 case. Without this amendment, bankruptcy judges are only allowed to strip or avoid 2nd trust deed on properties that are not supported by any equity. Nothing can be done to modify the terms of a first mortgage.

Eddie Bauer in bankruptcy

Monday, 10 August 2009 04:19 Atty. Lawrence Yang

WHO doesn’t know who Eddie Bauer is? Think Circuit City or Linens-n- Things. Eddie Baueris a well-known sporting goods retailer with 370 stores across the United States and Canada. It started doing business in Seattle in 1920. Because of the recession, it has not turned a profit in the last 3 years. It has allegedly lost at least half a billion dollars since 2005.